Indonesian President Joko Widodo, accompanied by former Malaysian prime minister Mahathir Mohamad, center, looks at a Proton Iriz prototype at the Malaysian carmaker’s R&D center in Shah Alam, Selangor, on Friday. (Antara Photo/Udden Abdul)

Joko Seen Making Yet Another Concession to PDI-P 'Cronies' With National Car Program

FEBRUARY 08, 2015

Jakarta. President Joko Widodo has left Indonesians flabbergasted at his decision to appoint a little-known company led by a political supporter as the local partner for a joint venture to build a national car.

Joko, on a state trip to Malaysia, visited the factory of local car manufacturer Proton on Friday, where he witnessed the signing of a memorandum of understanding between the automaker and Indonesia’s Adiperkasa Citra Lestari to set up a joint venture looking into the feasibility of developing and producing an Indonesian car.

Signing on behalf of ACL was its president director, Abdullah Mahmud Hendropriyono, a former intelligence chief dogged by allegations of gross human rights abuses; Proton chairman Mahathir Mohamad, a former Malaysian prime minister, was also present at the signing.

Hendropriyono is known to be close to Megawati Soekarnoputri, Joko’s political patron and the chairwoman of the Indonesian Democratic Party of Struggle, or PDI-P. That Joko picked his company – which is not registered with Indonesia’s Industry Ministry and whose history and line of business are unknown – to represent Indonesia in the joint venture has prompted speculation of yet another concession being made by the president to his party chief.

“Out of dozen[s of] potential partners, why Proton? And why Hendro? Why, why…” tweeted Ulil Abshar Abdala, a Democratic Party official.

“Suharto was in power more than 25 years before he granted the concession for a national car to his cronies. Just FYI, bro,” he added.

That earlier project was helmed by the late strongman’s son, Hutomo Mandala Putra, better known as Tommy Suharto, and essentially just rebadged Kia cars from South Korea as Indonesian-assembled Timor vehicles. It ran from 1996 to 1999, before the combination of the Asian financial crisis of 1997-1998 and Suharto’s fall from power in 1998 forced its closure.

Joko has long expressed his ambition to launch a new national car project, and in early 2012 championed the Esemka car assembled with parts imported from China by students at a vocational school in Solo, Central Java, where he served as mayor at the time.

Critics later said his endorsement of the venture was simply a publicity stunt to pave the way for his candidacy in the Jakarta gubernatorial election later that year, which he went on to win.

With the national car project on the verge of becoming a reality, the question being asked is why it was ACL and not the makers of the Esemka who were picked for the joint venture with Proton.

“If I was Jokowi, I would have brought Esemka into the cooperation with Proton Malaysia to produce a national car,” Fahri Hamzah, a deputy speaker of the House of Representatives, wrote on Twitter.

“He could have used this moment not just to launch the national car project but also to repay his friends at Esemka who he used,” Fahri added.

It is also unclear why Joko chose Proton to help develop an Indonesian car. The Malaysian manufacturer has a 1 percent share of the Indonesian car market, while Japanese auto giants Toyota, Daihatsu, Honda, Suzuki and Nissan dominate the market with a wide range of mostly locally made or assembled vehicles – including quasi “national cars” produced under the so-called low-cost, green car program, in which 80 percent of the components are locally produced.

There are already indications that the new venture will mirror the Timor fiasco, with Proton simply rebadging some of its existing models for the Indonesian market.

Sofyan Djalil, the chief economics minister, said in Jakarta on Saturday that a prospective Proton assembly plant might be set up in Bekasi district, east of Jakarta.

“I asked Hendropriyono […] and he said he already had land in that area [for the plant],” Sofyan said as quoted by Bisnis.com.

In Malaysia, Mahathir said Proton would first see if its own cars “can be modified or be suitable for the Indonesian market.”

“Initially, we may export the Malaysian-made car,” he said as quoted by Malaysian state news agency Bernama. “Subsequently, we will assemble the car in Indonesia and then progress toward producing parts in that country, so that it will become a real Indonesian car.”

Mahathir added, “When you are a baby you need somebody to hold your hands.”

Car sales last year in Indonesia, presumably the “baby” in this context, amounted to 1,208,019 units; Malaysian car sales in the same period were 666,465 units.

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